These amendments are intended to lower the threshold by which mergers are considered by the ACCC. Under the current threshold a merger is only prohibited if it 'substantially' lessens competition. The use of the word 'substantially' makes the threshold a very high one requiring the merged entity to exercise market power after the merger. Proving the existence of market power requires proof of an ability to raise prices without losing business. Very few businesses would have market power under the definition as it is effectively only a monopolist that would have the power to raise prices without losing business.

Under the existing threshold relatively few mergers or acquisitions are stopped by the ACCC. Mergers and acquisitions reduce competition in the market and lead to higher levels of market concentration. A reduction in competition is detrimental to competition and consumers as it may lead to higher prices and reduced product choices. We need a stricter threshold for assessing mergers. Within this context the concept of materiality is adopted, as that is a commonly understood concept used in the accounting and business world to assess the impact of particular conduct or an event. In this context a merger will substantially lessen competition if it has or would have a noticeably adverse impact on competition by reducing in a material way the number of efficient independent competitors and the range of product choices available to consumers.

That is at the heart of this. We need to do a lot better. In recent years too many mergers have been approved by the ACCC. The ACCC does not have the legislative firepower to deal with these issues adequately. The threshold is simply too high under 'substantially'; 'materially' would remedy that.